Earnings extravaganza, Q1 GDP — What to know in the week ahead

A deluge of corporate earnings reports and U.S. GDP data will take center stage this week.

Earnings season kicks into high gear as heavyweights from every sector gear up to report first quarter financial results. So far, nearly 20% of the S&P 500 companies have reported their results. “Earnings are beating by 6.1%, with 80% of companies exceeding their bottom-line estimates. This compares to 5.4% and 71% over the past 3 years,” Jonathan Golub, Credit Suisse’s chief U.S. equity strategist, wrote in a note. Investors can expect reports from Amazon, Chipotle, Microsoft, eBay, Coca-Cola, and Boeing, among many others.

On the economic data side, U.S. gross domestic product (GDP) will be in focus. Stronger-than-anticipated economic data from last week boosted consensus estimates for the first quarter. Economists are expecting the U.S. GDP grew at an annualized rate of 2.1%.

“This week’s favorable growth news was capped off by this morning’s buoyant March retail sales report, and we are raising our estimate of real annualized GDP growth in Q1 to 2.9%, up from our previous estimate of 2.0%,” JPMorgan wrote in a note to clients Thursday. “After some shakiness around the turn of the year, the consumer came roaring back last month when total retail sales jumped 1.6%.”

Nomura also estimated stronger GDP growth than consensus estimates. “In the advance report, we forecast a 2.2% q-o-q saar increase in Q1 real GDP following the same pace of growth in Q4. Much of the growth was likely supported by net exports and inventory accumulation. Incoming data show a solid pickup in goods exports while imports slowed markedly, partly due owing to distortions caused by developments in U.S.-China trade negotiations.”